Which View Of Capital Spending Do You Believe?

The Commerce Dept.'s latest capital-spending survey, conducted in April and May, estimates that real capital outlays rose at a 2.8% annual rate in the first quarter and will be up 3% in 1991 as a whole. Yet its gross national product report says real nonresidential fixed investment plunged at a 15.9% annual rate last quarter. Although divergences between the two measures are common, this one is unusually large. Because the GNP estimate is based on actual shipments data, economists at Donaldson, Lufkin & Jenrette Inc. think it is more reliable, particularly in times of uncertainty. Thus, they predict that "capital spending will fall, not rise, in 1991."

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